February 27, 1997
COMMUNICATIONS WORKERS OF AMERICA, AFL-CIO, AND BARBARA WELLS, ANITA MCNUTT, LAURA A. REED, RONALD NUEL, JAMES AROSE, VICTORIA MAKRANSKY, ROSE DELVECCHIO, ANN LAURINO, MICHELE HOANG, MARYJANE QUINN, SUZANNE B. STARTS, MARIE D. IRWIN, RITA LAMBERT, EDWARD WORTMAN, CHRISTINE SANTIAGO, ELAINE LAMBERT, LOURDES FUENTES, ANN KELLY, SHARON CONA, JEAN KNOX, GERTRUDE WHITE, BEVERLY MCMURRAY, APRIL S. KRATZ, ANN M. ALLEN, SUE COCCIA, KARIN P. LINCOLN, SABRINA MELVIN, DONNA M. FRANCESCHINI, NORMA J. RUPLE, DAWN R. TORNEY, DONNA M. MONFORTE, MIKELLE BRISCOE, OLGA ITHIER, CHARLES V. KLINGBERG, NANCY GOMEZ, PATRICIA F. PFEFFERLE, PATRICIA E. MILOSZEWSKI, BERTHA M. HAGEN, MELANIE A. BAKER, KIMBERLY J. SMITH, JOANN LUZZI, MARGARET L. FOX, ANDREA A. MCGANN, MARYLOU WILSON, JANET SCHILLING, MICHELE A. HALDEMAN, JOAN R. CHAPMAN, GAIL S. BROCKWAY, ELIZABETH A. FEASLER, JOAN E. THOMAS, KELLY L. BLANKLEY, MICHELE M. HUMBRECHT, WALDEEN TOOMER, GARY A. SIMPERS, THERESA M. MADOSKY, DALE J. PORTER, EDNA M. PARCELS, CATHLEEN C. YATES, PATRICIA H. CALLAND, DOROTHY J. SMITH, MARIA T. DENSTEN, ROBERT H. IEZZI, MYRTLE M. GRAY, LENORA GREEN, SARAH A. TREMBECK, PATRICIA R. BRIANT, ROSEANN BARTLING, SHEILA ALEXANDER, MARIE DARPA-HOPKINS, CARMELA GALLINA, CATHERINE LOUGHMAN, CLAIRE STITES, IRENE JOHNSON, JEANNE CHEESMAN, CARIDAD GALEA, MELINDA JEFFERSON, GLORIA REBOVICH, PAULA RUELA, GINA TORALES, TONI ECKHARDT, LORETTA BAILEY, MONIQUE BERRY, ANITA DAVEY, SHELLY DIXON, MARTHA ENRIQUEZ, CLARA JONES, KATHERINE JONES, FRAN LOCKETT, KEISHA TAYLOR, CONSTANCE GORDON, SUSAN HAIGHT, BARBARA HAWKINS, RITA HERMANNS, DOLORES NICHOLAS, ROBERTA NICHOLAS, GLORIA QUINN, MICHELLE BATTLE-WEST, PAIGE CLEMONS, LILLIAN DELOACH, SALIHAH MUHAMMAD, EVELYN RIVERA, CYNTHIA TANN, TAMESHONE WILLIAMS, PAMELA WRIGHT, KATHLEEN GARRIGAN, MARY GARRIS, JOANN KEENAN-LARICK, KELLY VAN HISE, TAMMY VEALEY, EDITH BAEZ, DAISY CAPOTE, MARGARET FARLEY, ROSEANN GIBBS, MARITZA GONZALEZ, OLGA LINARES, SONIA NOEL, WANDA RODRIGUEZ, DELMA RODRIGUEZ, JUSTINA SUERO, DEYANNA BAIRD, DOROTHY BRASMER, DELORES COSGROVE, HELEN LEON, PRISCILLA LEUCK, ANGELA MASSARO, DONNA MILLER, MYRIAM MUINA, DIEDRE VANDUNK, DEBORAH BECOTE, VALRIE HENRY, ELBA SUAREZ, FLOR TORRES, KATHLEEN GROOME, JACQUELINE HOWARD, NANCY LAMSON, EVONNE LONG, DOLORES MARANILLI, GWENDOLYNN ROSS, DIANA WISE, SHEILA ARMSTRONG, GERTRUDE BROOKS, PATRICIA DITULLIO, RUTH EFRUS, ELIZABETH FERGUSON, MERYL HAYS, GLADYS JENNINGS, EMILY RENZULLO, TALIANA WOODBRIDGE, CHARLENE BOOTH, VIOLA BOYKINS, DIANE CANGAELOSI, LIDIA CROCCO, SUSAN FULLER, DIANE GROTZ, DAU THI HOANG, RONA HOLMES, SUREE SAEJIA, DOROTHY TALAMINI, PRIOR SCHLENDORF, SHIRLEY CALDWELL, MARYLOU CAMMISA, ARTHERIA DAVIS, EUGENE FARRELL, ESTHER FRAZIER, THOMAS HURLEY, DORIS KANTER, BEVERLY NATOLI, ANNE REID, CONSTANCE RIZZO, KAREN SCELZA AND CYNTHIA WILLIAMSON, PLAINTIFFS-APPELLANTS,
CHRISTINE TODD WHITMAN, GOVERNOR OF THE STATE OF NEW JERSEY, IN HER INDIVIDUAL AND OFFICIAL CAPACITY, DEBORAH PORITZ, ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, IN HER INDIVIDUAL AND OFFICIAL CAPACITY, AND C. RICHARD KAMIN, DIRECTOR OF THE DIVISION OF MOTOR VEHICLES, IN HIS INDIVIDUAL AND OFFICIAL CAPACITY, DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Mercer County.
Approved for Publication March 3, 1997.
Before Judges Landau, Wallace and Kimmelman. The opinion of the court was delivered by Landau, J.A.D.
The opinion of the court was delivered by: Landau
The opinion of the court was delivered by
This is an appeal from a R. 4:6-2(e) order of dismissal. The plaintiffs in this case are the Communications Workers of America, AFL-CIO, and individual members of that union who were formerly State employees at certain State-operated Motor Vehicle (MV) agencies which were re-privatized in 1995 by an executive order of reorganization issued pursuant to N.J.S.A. 52:14C-1, -11. This followed a nine year period when twenty-five agencies were being operated directly by the Division of Motor Vehicles.
Since 1986, efficiency of direct State operation has been explored, using a hybrid system in which about half the Motor Vehicle agencies remained private and half were operated by the State. The new plan again privatizes the local agencies that the DMV had been operating, with the Director continuing to appoint private Motor Vehicle agents as independent contractors under N.J.S.A. 39:3-3. This statute, which provides authority for the Director's appointment and removal at will of Motor Vehicle agents, has remained unchanged in its essence since 1921. See In re Fitzgerald, 188 N.J. Super. 476, 457 A.2d 1208 (App. Div. 1983).
Public bidding has never been employed by DMV directors when exercising the appointment power conferred under N.J.S.A. 39:3-3. On May 12, 1995, the re-privatization plan became effective.
Plaintiffs sought declaratory and injunctive relief in the Law Division, asserting that re-privatization violated their First Amendment rights by discriminating against them on the basis of party affiliation; violated public contract competitive bidding and civil service statutes; and denied them due process and equal protection of the law. Named as defendants were the Governor of New Jersey, the Attorney General and the State Motor Vehicle Director (hereinafter referred to collectively as the "State", unless separately referenced).
Plaintiffs moved for a preliminary injunction to halt privatization. This was denied. Following a hearing on the State's cross-motion to dismiss for failure to state a cause of action, the motion Judge entered an order dismissing the entire complaint. This appeal followed. Requests for stay pending appeal were denied. We affirm in part and reverse and remand in part.
In determining whether a complaint states an actionable claim, a reviewing court must scan its allegations with great liberality before the court can grant a motion to dismiss on the pleadings pursuant to R. 4:6-2(e). The allegations must be taken as true, and all inferences must be resolved in favor of plaintiffs. See Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746, 772, 563 A.2d 31 (1989); Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 192, 536 A.2d 237 (1988).
It is argued that the Motor Vehicle Director may not award contracts to private Motor Vehicle agents under N.J.S.A. 39:3-3 without complying with the advertising and bidding requirements of N.J.S.A. 52:34-5. Plaintiffs say that only strict adherence to the public bidding laws can protect against "resurrection of a patronage appointment system."
In a related argument, plaintiffs challenge the motion Judge's reliance upon Horn v. Kean, 796 F.2d 668 (3d Cir. 1986). In Horn, a severely split Court of Appeals held in an en banc opinion that the First Amendment was not violated when New Jersey Motor Vehicle agents, found by that court under New Jersey decisional law to be independent contractors rather than public employees, can be replaced for political reasons. The Third Circuit held that the First Amendment protections afforded to public employees under Elrod v. Burns, 427 U.S. 347, 96 S. Ct. 2673, 49 L. Ed. 2d 547 (1976) and Branti v. Finkel, 445 U.S. 507, 100 S. Ct. 1287, 63 L. Ed. 2d 574 (1980) were not applicable to the New Jersey agents. Plaintiffs here contend that while the privatization scheme may not have removed them from their jobs because of their own personal beliefs or actions, it did permit appointment of politically connected independent contractors. This, it is argued, violates the constitutional right to affiliate or to choose not to affiliate with a political party. Moreover, as civil service employees, plaintiffs say in effect, their rights to protection against loss of jobs and pension vesting opportunities should rise even higher than rights of independent contractor Motor Vehicle agents who are replaced or removed for political reasons.
Finally, plaintiffs assert that the early dismissal of their complaint on the pleadings operated to deny them the right to explore by discovery the degree of control exercised by the Motor Vehicle Director over how Motor Vehicle agents perform their duties, and thus whether they are, in fact or law, actually state employees rather than independent contractors. It is argued, too, that plaintiffs' due process and equal protection claims should not have been dismissed on the pleadings.
The Horn First Amendment Issue
Several months after the motion Judge granted the State's motion, the United States Supreme Court decided Board of Comm'rs, Wabaunsee County v. Umbehr, U.S. , 116 S. Ct. 2342, 135 L. Ed. 2d 843 (1996) and O'Hare Truck Service v. City of Northlake, U.S. , 116 S. Ct. 2353, 135 L. Ed. 2d 874 (1996). In these cases, the Supreme Court found that independent contractors were entitled to protection under the First Amendment from termination of their contracts in retaliation for exercise of the freedom of political affiliation and participation, subject to a weighing process of the government's interest as a contractor against those free speech interests in accordance with Pickering v. Bd. of Ed., 391 U.S. 563, 568, 88 S. Ct. 1731, 20 L. Ed. 2d 811 (1968).
Umbehr and O'Hare thus extended to independent contractors the rights heretofore enjoyed by public employees under Branti v. Finkel, 445 U.S. 507, 100 S. Ct. 1287, 63 L. Ed. 2d 574 (1980) and Elrod v. Burns, 427 U.S. 347, 96 S. Ct. 2673, 49 L. Ed. 2d 547 (1976) and to prospective public employees under Rutan v. Republican Party of Ill., 497 U.S. 62, 110 S. Ct. 2729, 111 L. Ed. 2d 52, reh'g. denied 497 U.S. 1050, 111 S. Ct. 13, 111 L. Ed. 2d 828 (1990). Umbehr and O'Hare reject the rationale of the plurality opinion in Horn v. Kean, (supra) , to the extent it distinguished the First Amendment interests implicated when public employees are coerced in their political beliefs by patronage practices, from the First Amendment interests of persons who contract independently with the State. See O'Hare, 135 L. Ed. 2d at 884. It is now clear that independent contractors such as the New Jersey Motor Vehicle agents, previously held in Horn not to be insulated by the First Amendment from patronage replacement *fn1, must be afforded the same First Amendment protection enjoyed by government employees and prospective government employees under Rutan, Elrod and Branti.
Although the government has broad discretion in formulating its contracting policies, we hold that the protections of Elrod and Branti extend to an instance ... where government retaliates against a contractor, or a regular provider of services, for the exercise of ...
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